Erm II and euro implications for manufacturing industry in Malta

Abstract

Malta joined the Exchange Rate Mechanism II in 2005 and is planning to adopt the Euro on the 1st January 2008. This dissertation seeks to examine the implications that ERM II and euro adoption have for manufacturing industry in Malta. It gives a general overview of, and a comparison between, the theoretical costs and benefits of a common currency: it uses these theoretical points to analyze the advantages and disadvantages from the perspective of Malta in general and its manufacturing industry in particular: and it reviews the effect of euro adoption on industry in the current euro area. The study then explains the detailed findings of the survey conducted specifically for this dissertation among a cross-section of manufacturing firms to find their views and perceptions on the implications of ERM II and euro adoption.